#7185 - Incorporation And Construction Super Summaries - Contracts 2

Terms:

Statements made during negotiations

• Only a promise expressed as an assurance, guarantee or promise would give rise to a collateral warranty

• The word ‘estimate’ should be construed as an ‘approximate calculation based on probability’

• The only conclusion on the evidence was that Blakney formed his own judgement relying on the appellant’s opinion

347/2 [442]

347/4 [443]

Skinner splits statements made in negotiations into: Puff, representation and contractual promise (the first having no, the second some and last much contractual significance)

Furthermore he says that the English approach differs to the Australian approach but may be mentioned first.

His four steps in analysing whether or not something is a contractual promise:

• Identify the type of contract

• Identify the terms of the contract

• Apply the common law test

• Analogize to cases

The textbook cites: the words used, relevant expertise of the parties, importance of the statement/temporal considerations as all being relevant.

• If a representation is made for the sole purpose of, and succeeds in, inducing a party to enter into a contract this creates a prima facie ground for inferring that a warranty is intended

• This can be rebutted if proved it was an innocent representation

• The inference is not rebutted in this case because the dealer “was in a position to know the history of the car”. He could get it by writing to the makers but he did not do so.

• He ought to have known better and there was no reasonable foundation for his statement.

Terms: The effect of signature

OR Incorporation by Signature

What was the effect of signing a contract, a term of which excluded all other express or implied terms?

What was the effect of signing an Application for Credit

• When a document containing contractual terms is signed, then, in the absence of fraud (or misrep) the party signing it is bound and it is immaterial whether he has read the document or not.

• No evidence of fraud could be found – whether or not the plaintiff knew she signed an order form is immaterial, it was an order form and order forms contain contractual terms

• There is no evidence of misrepresentation – the document was headed ‘Sales Agreement’

• Hence the plaintiff cannot be heard to say she is not bound by its terms.

Le Mans was a case where it was held an exclusion clause did not apply because there was no finding of a contract of hire – the document signed was not intimated to the plaintiff as a contractual document.

Further it seems to be a relevant consideration as to whether or not the document is contractual in nature.

Click-wrap contracts are binding where “appropriately reliable methods” are used to indicate approval and consent to requirements – e.g. an “I accept” button (eBay v Creative Festival Entertainment)

• Any behaviour, by words or conduct, is sufficient to be a misrepresentation if it is such as to mislead the other party about the existence or extent of the exemption

• By failing to draw attention to the width of the exclusion clause, the assistant created a false impression that the exemption clause applied only to beads and sequins

• Furthermore it may have been understood that the document was merely a voucher and not contractual in nature. But in this case the customer had actual knowledge that it was contractual.

361/3 [809]

361/4 [809]

• Conventional offer and acceptance analysis needs to be applied

• If an exemption clause is made to a party unaware that it is to be included the other party must do “all that [is] reasonably necessary” to bring notice of the clause to the party.

• The ticket cannot be regarded as an offer. The objective intention of the parties must have been that it was performance of a contract of carriage. The ticket was a voucher of entitlement to be carried on terms already agreed. The exchange order was an option to acquire the ticket

  • Their honours were led to this conclusion by the insufficiency of opportunity to read and elect whether to accept (incl. Travel to Greece)

• The exchange order mentions a ‘Sun Line passage contract’ but no particulars are given as to the ‘exclusive jurisdiction clause’ are made. Since insufficient was done to bring the clause to his attention it was not incorporated into the contract of carriage and could not be incorporated by insertion into the ticket.

Is this only for contracts of carriage? Tread lightly. All so called ‘ticket cases’ should be analysed according to traditional O&A analysis subject to common sense.

Skinner’s 3 questions to answer in cases of incorporation:

• What is the claim made (e.g. failure to return goods) and what is the cause of action (negligence, contract)

• What is the defence (e.g. clause excluding liability – incorporated in 1 of 5 ways)

• If the term is incorporated, does it do what the defence contends it does (Question of construction)

• Terms of a contract may be implied from the circumstances without even looking to the question of reasonable notice.

• [implied] Actual knowledge of contractual terms can defeat a claim on its own

• Having travelled on the company’s boats on many occasions, he must have known their method of conducting business

• The only contract to be implied is one of carriage.

• His rights were hence no different from someone who had got off the boat – he was on private property of his own free will and thus could only exit upon compliance with the conditions

370/2 [391]

370/3 [391]

Relevant considerations are hence:

• Timing (Rinaldi and Hill)

• Consistency (McCutcheon)

• Number of occasions (SAPPA/Lillico)

• Contractual documents (Rinaldi and Hill)